Calls are growing for big businesses, including mining companies, to shorten payment terms to their suppliers amid the coronavirus crisis.
Australian small business and family enterprise ombudsman, Kate Carnell, has urged big businesses not to use the coronavirus economic downturn as an excuse not to pay up.
“Cash flow is always king for small businesses and never more so than now, particularly for small businesses struggling with the ripple-effects of coronavirus,” she said in a statement.
The ombudsman praised mining giants BHP and Rio Tinto for committing to faster payment times.
BHP announced an accelerated payment program in March, reducing payment terms from 30 days to seven days for more than 1100 small Australian businesses.
The company also announced it would immediately pay its outstanding invoices, delivering more than $100 million to its small business partners.
In February, Rio Tinto offered an accelerated payment option for suppliers requiring shorter payment terms than the agreed 30 days.
Adding her voice to the ombudsman’s campaign, Queensland’s minister for employment and small businesses, Shannon Fentiman on Friday asked big businesses to step up.
“We know our thousands of small businesses are doing it tough right now and we need to do everything we can to help them stay open and keep people in jobs,” she said.
To help small companies with cashflow, the Queensland government will be fast-tracking payment times to small businesses registered on the Business Queensland website.
From 1 July 2020, the state government will reduce the time frame for small business suppliers from 30 calendar days to 20 calendar days for eligible invoices of any value.
For eligible invoices, the Queensland government will pay penalty interest to small business suppliers for all invoices on contracts up to $1 million paid greater than 30 calendar days.